This week, I am taking part in a “blog symposium” hosted by Prof. Josh Wright (U. Texas Law) on his blog (Truth on the Market). The symposium focuses on a new book by Prof. Michael Carrier titled Innovation in the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law (Oxford 2009). In the book, Carrier identifies a number of problems with the antitrust and IP laws – and then proposes solutions. Carrier’s book moves in the same vein as other recent law professor books critiquing IP Policy such as the Meurer and Bessen book Patent Failure. Here, however, Carrier spends less time proving that a problem exists and somewhat more time identifying solutions.
Early posts include:
· Reverse Payment Settlements: Carrier suggests that reverse payments patent settlements should be made presumptively illegal or even per se illegal. These payments have become somewhat common where a patent holder will pay a generic to stay off the market and not further challenge the patent rights. Prof. Dan Crane (Cardozo) argues that rule does not make sense because there is no direct link between the direction of the settlement payment and the potential anticompetitive social harm of the settlement. [LINK]
· Patents Blocking Antitrust Action: Carrier suggests that the existence of IP rights should not grant a company a free-pass to take otherwise anticompetitive actions. In his post, Prof. Phil Weiser (Colorado) agrees “IPRs should not displace antitrust oversight.” Weiser argues that this is especially true in the area of software patents: “Given that software patents are controversial to begin with, awarding the recipient of a patent on an application programming interface or communications protocol a get-out-jail free card is hard to justify.” [LINK]
· Mergers in the Innovation Market: Carrier suggests stronger antitrust regulation of mergers in the “innovation market” – as opposed to more traditional merger analysis that focuses only on product lines. In his post, Geoff Manne (LECG) points to the biggest hole in Carrier’s book – that he chooses sides without enough evidence either way. In this case, Manne notes that “we don’t know about the relationship between market structure and effect, and error costs are high.” From Manne’s perspective, innovation markets are so dynamic that Government antitrust intervention will necessarily arrive at the wrong answer too late and do harm. [LINK]
· Standard Setting and Patent Holdups: Carrier identifies the “patent holdup” situation as having a particularly troublesome antitrust concern because it looks like attempted monopolization – especially where the patent holder pushes an SSO to adopt a standard that would infringe. Wright argues that such antitrust liability would be quite problematic. [LINK]